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Calculate Your CODB

Lincoln Barbour has a great post on Cost of Doing Business for Photographers.

Being in business as a photographer, you have to know your CODB, because that’s how you set your Baseline Creative Fee (BCF). If you take jobs that are below your CODB, you are operating at a loss. You should also do your CODB every year to make sure you’re staying on track and to set sales goals.

It’s always good to remind people that they need to know their CODB. There are too many photographers lowballing just to have cash flow. Do it long enough and you are neither professional or still in business.

I guess I never understood how standardizing your pricing will get you more jobs that pay better. Knowing your CODB is important, but it won’t have an effect on a client hiring you or not. Especially in the editorial world. Most editorial jobs are take it or leave it propositions (unless you have a certain name). They call and say “we have $XXX + expenses” or more commonly “we have $XXXX flat fee”. You can usually bump them a bit from there, but not usually anything specific. So, if you know your CODB and that fee is less than that,you can say no… But the client isn’t going to say “oh, that’s below your CODB… Well then we’ll increase it to cover your CODB”.

And, if it’s a good rate for the shoot but lower than your CODB and you have nothing else going on that day… What are you going to do, say no? (the key to that sentence was “it’s a good rate for the shoot… Obviously you say no if it’s a bad rate even if you don’t have anything else to do that day). It seems like you would especially want to take the job if you don’t have another job opportunity because your business costs (electricity, studio rent, etc) are still going that day whether you take the shoot or not. If you don’t take the job, that increases what you need to make on the next shoot.

craig

Editorial should be looked at as advertising/portfolio building that happens to offset its time cost somewhat. The pay is below CODB for virtually everyone.

As for commercial work, yes, turning down below cost – or below what you want to make – is absolutely a good idea. One place you don’t want to be is on the list of cheap people to go to when there’s no money. You’ll have the same expectations as higher paying work, only no money and way more hassle. And you’re not going to get off that list.

Go broke tomorrow or go broke next month… better to get it over with, I mean go look at credit lines from 15 years ago, how many are still actively working? :)

Bruce Blank

Lincoln,
You’re to be commended for bringing this system back to the forefront! This is exactly what I was preaching when I gave the ASMP MEANS BUSINESS seminar all around the country in the 90’s. You’ve made an old man proud!

craig

I’m glad to see someone not advocating a simple-but-unrealistic one-size fits all approach.

We typically bid by project. It can be more complicated as Lincoln notes, but not if you’re organized. I keep spreadsheets of bids won/lost/ignored, segmented by what type of client it was – local, national, agency etc. From there I compute an effective-hourly-rate which is cost (not including expenses)/estimated time.

With enough data, patterns emerge to where you can see what most clients in a certain segment are willing to pay. Of course, not all decisions are made by cost alone so keep track of that information too. This can be handy knowledge to guide your marketing efforts as well.

This doesn’t apply to large scale campaign work where usage fees drive the majority of the invoice, but for rather for weekly bread and butter clients.

craig

I should point out effective hourly rate is an internal metric only. On bids this gets converted to either day or per-scenario usage fee. Lots of times we do per-scenario as opposed to per-shot since a ‘shot’ might be a simple angle change that requires no significant time to switch to.

Anna

thanks Lincoln for posting!
It helps us photo editors on the other side understand budgets & breaking down costs.
I realize this isnt specifically for editorial commissions, but it’s still good to know…